I find it amusing that many of the articles that recommend change to the auto industry often include a point about demonizing SUVs and moving resources to building hybrids, as if that’s the main reason that GM, Chrysler and Ford are failing.
It’s amusing, because it ignores the fact that had GM et al. not put all their eggs in the SUV/truck basket, they probably would’ve gone under a decade ago.
Detroit remains saddled with a cost structure that prevents making profits on any vehicles besides gas-guzzling trucks and SUVs.
The problem isn’t that Detroit put their eggs in the SUV basket. From a short-term perspective, what with their crippling cost structure, it was actually probably the most prudent thing to do. The problem is that:
- They put all their eggs in the SUV basket, costing them the ability to adapt quickly to rising gas prices and a faltering economy (lower sales)
- They failed to address the problem with their cost structure until it was too late to do so (rising costs)
Hybrids may or may not be the wave of the future, but if you look out on the roads, they’re not exactly taking the world by storm. And the Prius didn’t stop Toyota from having its worst year in nearly 60 years. Putting taxes on SUVs or requiring automakers to focus specific resources on building eco-friendly cars as part of bailout packages isn’t going to do much for US automakers’ future success. It just means they’ll probably be caught flat-footed again, when the US public decides that they want the next non-hybrid monstrosity.